Lancaster corporation is planning an equity issue to finance a new project. Lanc

Question

Lancaster corporation is planning an equity issue to finance a new project. Lancaster plans to issue 100,000 shares of stock. Projected EPS after completion of the projected is $ 11 and total shares outstanding will be 200,000. What are the projected after taxe earnings after completion of the project ?
A. $ 2. Million B $ 2.2 million C $2.4 million D none of the above Lancaster corporation is planning an equity issue to finance a new project. Lancaster plans to issue 100,000 shares of stock. Projected EPS after completion of the projected is $ 11 and total shares outstanding will be 200,000. What are the projected after taxe earnings after completion of the project ?
A. $ 2. Million B $ 2.2 million C $2.4 million D none of the above
A. $ 2. Million B $ 2.2 million C $2.4 million D none of the above

Explanation / Answer

Correct option is > B $ 2.2 million

Projected after tax earnings = Projected EPS x Projected outstanding total number of shares

Projected after tax earnings = 11 x 200000

Projected after tax earnings = $2,200,000 or $2.2 million

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